K-12 gets some concessions in AZ Legislature’s newly passed budget

The Arizona Legislature approved an FY2017 state education budget early Wednesday that does not delay the implementation of current year funding for school districts, however thanks to the hard work of education organizations and school districts dollars were allocated to relieve negative financial impacts in the year ahead.

The budget will now be reviewed by Governor Doug Ducey.

Arizona lawmakers approved a roughly $9.6 billion budget shortly after midnight Wednesday that they credit with increasing spending after years of tough decisions while the state slowly recovered from economic turmoil, according to the Arizona Capitol Times.

The budget restores some funding to K-12 education and provides a tax cut for business owners, while ignoring pleas to restore KidsCare, a children’s health care program for low-income families that had gathered from Democrats and moderate Republicans last week, according to The Arizona Republic.

In a statement Wednesday morning, the Arizona School Boards Association said the budget does provide funding to prevent cuts to districts that lose funding under the implementation of current-year funding, another year of funding for district-sponsored charter schools for those remaining at the current funding level and protects invisible space calculations for all schools.

“Although we would have preferred a delay to the implementation of current-year funding, we are grateful that the state will fully fund any shortfall school districts see from this change in FY17,” the ASBA statement said. “We will continue to educate state leaders on the need for policy changes to address current-year funding in the coming years.”

Starting next year the calculation of the Base Support Level for both school districts and Joint Technical Education Districts will be based upon current year count, which is the largest component in determining state aid and budget capacity, said Chuck Essigs, executive director of the Arizona Association of School Business Officials.

However, all other school funding components like Classroom Site Fund, Instructional Improvement Fund, override calculations, small school exemption, tuition calculations, and more will still be based upon prior year count, Essigs said.

“The budget does include a hold harmless provision for FY 2017 that was added today that will provde assistance for districts that will be declining from this year to next school year,” Essigs said. “This provision will have Arizona Department of Education adjust the state funding level and budget capacity for districts that are declining in FY 2017 to offset the impact of moving to current year funding.”

That provision will only be made for FY2017, and will require the legislature to fund the additional state aid cost to state aid districts, Essigs said.

State aid and non-state aid districts will have increased budget capacity from this provision, but the cost for non-state aid districts will be paid by local taxes, which is consistent with how the current school funding formula works for state aid and non-state aid districts, Essigs said.

Expect More Arizona was one of the groups who had advocated for a delay in Current Year Funding to ensure Arizona’s K-12 schools budgets were not cut by $31 million next year.

“We are encouraged by the support for education reflected in the FY17 state budget passed by the Legislature last night, which we believe is a result of the persistence of education advocates across the state,” said Expect More Arizona in a press release on May 4.

“We are pleased that K-12 education has a net positive budget, including holding schools harmless as they transition to Current Year Funding and restoration of funding for Joint Technical Education Districts,” Expect More Arizona said. “Additionally, $32 million was appropriated for our universities, a portion of which supports the resident funding model. These are incremental steps in the right direction that are needed to support the long-term solution for education funding.”

“We know without a doubt that more needs to be done to support education and to ensure students arrive healthy and ready to learn,” Expect More Arizona said in its statement. “Next steps include passing Proposition 123, renewing and updating Proposition 301, continued investment in our community colleges and universities, increasing compensation for Arizona’s educators, and responsibly using the state surplus.”

Earlier budget proposals reduced the important School Facilities Board calculations for invisible space in buildings, which would have negatively impacted growing schools, according to the ASBA statement.

Appropriations for Agua Fria Union High School District and for Chandler Unified District were approved for their schools that already had School Facilities Board approval. However, the funding will be spread out over two years.

The proposed provision that was going to reduce invisible space from 25 percent to 10 percent for the calculation of when a district would qualify for a new school was deleted from the final budget bill, Essigs said.

“The final budget removes that change, protecting the current process of calculating the need for new facilities and ensuring a district is reimbursed if they use their own funding to complete a school facility,” the ASBA statement said.

Also, funding will be appropriated for the remaining district sponsored charter schools to allow them to remain at this year’s reduced funding level for FY2017, Essigs said. Non-state districts aid with district sponsored charter schools will have budget capacity at this year’s reduced level continued for FY 2017.

ASBA also says that the budget legislators passed:

Funds FY17 Inflation with two options, setting the FY17 Base Support Level at $3,635.64 if Proposition 123 passes and at $3,460.66 if Proposition 123 is not enacted.

Amends statutory language on average daily membership (ADM) to define “student count” as ADM, to establish a calculation of base support level to determine school district rollover allocations and overrides, and to repeal allowance for a school district to adjust budget and state aid as a result of growth in student count.

Increases the per-route mile transportation funding formula by .99%.

Continues the rollover to defer a payment of $930.7 million, delaying the payment by up to two weeks into the new fiscal year.

Continues the reduction in District Additional Assistance (DAA), and continues to state that the legislature intends for school districts to increase the total percentage of classroom funding over the previous year for instruction, student support, and instruction support.

Requires non-state aid districts to reduce their DAA budgets by the same amount it would be reduced if eligible for state aid.

Caps the sum of DAA reductions for districts with a student count of less than 1,100 students at $5 million.

Creates the “Arizona Public School Credit Enhancement Program,” an adaptation of the Access Our Best Public Schools Fund created last year, to provide assistance to schools seeking financing for new or expanded facilities (charter schools are the most likely to participate). The financing mechanism would be backed by the $23.9 million appropriated last year toward reducing wait lists at charter schools.

For the School Facilities Board:

Appropriates $23.1 million in FY17 and FY18 toward Building Renewal ($16.1 million will revert back to the state if a union high school does not qualify for the funding).

Allows school districts to pay for new facilities approved by the SFB if state funding is unavailable, and authorizes reimbursement when remaining appropriations are available. This applies only to FY17 and FY18.

Provides $500,000 for Credit Enhancement transaction costs.

For charter schools:

Increases the charter additional assistance funding by .99%, providing $1,752.10 for students in grades K-8 and for students in preschool programs for children with disabilities, and $2,042.04 for students in grades 9-12.

For FY17, maintains current funding for small school weight.

For Joint Technological Education Districts (JTEDs):

Appropriates $29 million to JTEDs, continuing state aid to JTEDs with more than 2,000 students at 95.5%, and computes the state aid reduction on the prior year rather than current year average daily membership.

Retroactive to July 1, 2015, allows a student under the age of 21 to complete a JTED program, even if they have graduated from high school or received a JTED, through the end of FY16 or until the student completes the program, or through the end of FY17.

Modifies the student enrollment reporting requirement on JTEDs to include the percentage of second-year enrollees and percentage of students completing the program.

Provides an offset of $1.1 million for district-sponsored charter schools, preventing cuts this fiscal year.

Appropriates $160,000 in FY16 and $90,000 in FY17 for tribal school dual enrollment.

In FY16, provides $2.7 million for professional development courses through ADE.

Creates a College Credit Incentive Program Pilot, appropriating $5 million to ADE in FY18 to provide an incentive bonus to teachers, school districts, and charter schools for students who obtain college credits by examination while in high school; specific awards for student performance are outlined.

Appropriates $500,000 to ADE for grants for participation in a Code Writers Pilot Program (designed to benefit existing efforts in Native American school districts), and specifies administrative requirements.

Reduces funding for the Technology-Based Language Development and Literacy Intervention Fund from $300,000 to $246,800.

Designates $100,000 of funding to the ADE School Safety Program to be used for an Emergency Readiness Pilot Program, and requires ADE to select three school districts that apply for participation in the Program.

Designates $500,000 of ADE funding for technical assistance and state-level administration of the K-3 reading program.

Provides $100,000 for ADE to issue a grant to a statewide alliance for geographic literacy.

“Education is currently the top priority for Arizona voters and the business community,” Expect More Arizona said in its statement. “Now, it is up to all of us to hold our elected leaders accountable to work toward this long-term solution together.”